Multimodal route choice in maritime transportation: the case of Korean auto-parts exporters. Issue 1 (2nd January 2018)

• Record Type: Journal Article
• Authors: Woo, Su-Han; Kim, Sun-Nam; Kwak, Dong-Wook; Pettit, Stephen; Beresford, Anthony
• Is Part Of: Maritime policy & management. Volume 45:Issue 1(2018)
• Page Start: 19
• Page End: 33
• Publication Date: 2018-01-02
• Subjects: Auto-parts industry -- transport route choice -- inventory-theoretic model -- scenario analysis; Marine resources -- Periodicals; Shipping -- Management -- Periodicals; Policy sciences -- Periodicals; 333.9164
• DOI: 10.1080/03088839.2017.1344783
• Languages: English
• ISSNs: 0308-8839

Abstract

ABSTRACT: Global offshoring has increased the need for transport of half-finished goods and components, along with finished goods. The auto-parts industry in Korea has also entered the global market as Korean car manufacturers have started to build overseas factories. Maintaining cost competitiveness by minimising total logistics costs will thus be a critical strategy for the industry. This research compares the total annual costs of four feasible transport routes from Korea to the US using the inventory-theoretic model, which encompasses direct transport costs, in-transit carrying costs, and warehouse inventory costs. We apply this model to real transport data collected from a Korean auto-parts company. A static analysis shows that inventory costs can play a decisive role in altering the cost competitiveness of different routes. In addition, sensitivity and scenario analyses with changes in variables and the market situations reveal that the cost structure of each route plays an important role in determining their relative cost competitiveness in varying market conditions.